Fábio Luiz de Oliveira Rosa

Social
Entrepreneur
 Today we will discuss:
• THE PROBLEM: Poverty in Brazil

• THE STRATEGY: Fabio Rosa’s New Idea

• THE IMPACT: Brightening the Lives of

Poor and Rural Brazilians
 Overview: Poverty in Brazil
• The Facts:
– With a population of 180
million, Brazil is home to
extreme contrasts of
wealth and poverty

– The richest 10% consume

46.9% of the income, while
the poorest 10% get by on
0.7%

– 80% of the rural population

(30 million people) live in The Recife area is marked by the
highest income inequalities in Brazil.
conditions of poverty
These 2 pictures were taken
less than 1 mile apart.
 Interview: First Hand
Perspective on Poverty in Brazil
• Could you generally describe how you saw the disparity between the
rich and the poor in Brazil?

The issue is not the size of the pie, but how it is distributed. The
border between wealth and poverty is strikingly apparent.

• We are also focusing on the efforts made to get electricity in more

homes in Brazil. How do you recall others struggle without
electricity?

I think this problem is more prevalent in the countryside. In the

cities, most favelas illegally pull power cords down from the power
network, so most houses have electricity “for free.” In the
countryside, however, it would be much harder to do so, so most
people do have to live without electricity.
Click here for full transcript of the interview
 Fábio Luiz de Oliveira Rosa
• WHO: A social entrepreneur and
businessman (STA & IDEEAS)

• WHAT: One of Rosa’s early successes has

been the development of low-cost rural
electrification models that improve the quality
of life for the rural poor and slow urban
migration

• WHY: Surveys of poor rural Brazilians

revealed that electricity was at the top of their
list, even above better working conditions

• HOW: In the late 1990’s, Rosa realized an

opportunity to provide affordable energy when
Brazil’s electric utilities were privatized
“I knew my work was important
because two billion people still
lacked electricity…. I became
convinced that solar energy would
prompt economic activity, improve
education and health, decrease
carbon emissions and relieve
stress on overcrowded cities.”
-- Fabio Rosa
 Why Focus on Electricity?
Electricity is a root cause of poverty in Brazil.
The use of electricity in rural areas can enhance:

Education GE
R
E LA IME
RE F T
N F SO O R
CA UNT N LA B
O
A HUMA
M
& Safety
Health

Economic
Wellbeing
$
 I
S D
T E
A A
A
S
Agroelectric System of Appropriate
Technology (STA)
• For profit, for those who spend at
least $11 per month
• Promote and sell solar energy
systems
• Develop cost-effective solar
systems at a low price
• Manufacturing of energy
components
• Inform population about the
benefits of solar energy
• Focus on poor rural areas
 Institute for Development of Natural
Energy and Sustainability (IDEEAS)
• Founded in 1997 as a non-profit
organization, for those who spend
less than $11 per month
• Promote and install renewable
energy in low-income areas in
Brazil
• Rural electrification
• Social business model
• Income generating schemes for
those at the bottom of the pyramid
• Combining high-efficiency and low
cost technology
The Sun Shines For All (TSSFA)
Business Model
• TSSFA – A project
under STA

• Market research
with McKinsey
• Package deal
• One time US $150
installation fee
• Leased equipment
• Flexible contract
PBS Special on TSSFA and Rosa
TSSFA - Supply Chain
TSSFA - Basic Kit
(US $10/ Month)
TSSFA - Kit 2
(US $16/ Month)
TSSFA - Kit 3
(US $24/ Month)
 TSSFA - The Future

• 12V appliance
store

• Electronic bill pay

kiosk

• Project Quiron
Project Quiron
 Program Impact
• Triple Bottom Line
– Financial
• Break-even Analysis and projections
– Social
• Electric Power helps improve quality of life, offers
opportunity for income generation, and helps
reduce mass exodus to Brazil’s largest cities
– Environmental
• Reduction in carbon emissions
 Financial Projections
2006 2007 2008 2009
Total Number 1,000 1,500 1,740 1,880
of Kits Leased

Accumulated 1,000 2,500 4,360 6,100

Number of Kits

The Sun Shines for All (TSSFA) estimates it will break-even

at the end of 2009 with over 6,000 customers

GOAL FOR FUTURE YEARS: Reach over 100,000

rural customers
 Social Impact
• People are more likely to stay in their local village instead
of migrating to overcrowded cities or shantytowns

• Solar-powered electricity
eliminates the need for dangerous
and unhealthy lighting products

• Sourcing components of the

energy kit from within Brazil
benefits the local economy
 Environmental Impact
• The Agroelectric System of Appropriate Technology (STA)
estimates that providing solar energy to 12,900 families
(52,000 people) would save:

- 9 million liters of kerosene

- 4.6 million kilos of liquefied
petroleum gas
- 46.4 million wax candles
- 9.3 million radio batteries
- 23.2 million liters of diesel
fuel

• Reduce global warming

 The Social Enterprise Spectrum
Mostly Philanthropic Hybrids Mostly Commercial
“Alleviating Poverty & Malnutrition: Successful Models”

Financing and development aid, Nutrition and Food Fortification, Food Production & Distribution

General Appeal to goodwill Mixed motives Impersonal exchange

Methods: Non-pecuniary rewards Some subsidy Arms-length bargaining
Mission driven Market driven
Fabio Rosa, STA, IDEAAS,
TSSFA, & Quiron

Key Stakeholder Relationships

Primary Unclear or needy Subsidized pricing Customer able to pay
beneficiaries: Not required to pay Price discrimination Priced for profit
Third-party payers
Capital Philanthropic Mixed debt & donations or Capital market rate
sources: Donations/grants subsidized investments Equity and debt
Work force: Volunteers with high Mixture of volunteers, Paid employees, focus on
Commitment to social professionals, paid staff or below- financial rewards
mission market wages

Suppliers: In-kind donations Discounts, or mixture of in-kind Charge market prices

and full price
Governance Mission-constrained Mixtures of representation and Board elected by owners
Self-perpetuating Board self-selection Property rights
stewardship Balancing constituencies Fiduciary responsibilities
 For Profit & Non-Profit Social Alliance:
Incorporating the Strengths of Both

For-profit:
STA & TSSFA
Strength $; Breakeven in 4 years;
Alliances/understanding of local
community and politics
Weakness Size; Lack of experience
compared to utility companies
in the area
Opportunity New technology can further
reduce costs;
Culture of constant innovation
Threat Powerful utility co’s may extend
grid into target area;
Default risk; Political obstacles
NGO:
IDEAAS & Quiron
Poor as employees–
sustainability; Empowering
$; Currently a start-up
(challenges of a young
business)
Can improve income and
living conditions; Opportunity
to reach the most poor; Social
and environmental impacts
Reliance on livestock/
agriculture – risk of natural
disaster or disease;
Micro-lending (credit risk)
 Fabio’s Strategy: A “Better Mousetrap”
Not simply a one size fits all strategy – different
business models to target different segments

Social alliances – incorporating

benefits of nonprofits and for profits

Culture of innovative thinking & creativity

Passion and drive of Fabio Rosa

Research & strong understanding of

demographics and communities
Prevents thefts
Ease – un-installation FREE
Perseverance, patience,
quality, and attention to detail
“
Fabio has changed my life. He
has allowed my family to not
only survive, but to thrive. He
is changing the lives of
every rural community
here in Brazil.

”
Questions?